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25.02.202103:44 Forex Analysis & Reviews: For the first time ever, a crypto exchange will become a public company: How will this affect the digital asset market?

The renaissance of the cryptocurrency market occurred at the beginning of 2021 and launched a chain of events that are already rewriting the history of financial markets, in their usual understanding. For the first time in history, the Coinbase cryptocurrency exchange will become a tradable company and issue shares. The entry of such a company into the public sphere will also affect the cryptocurrency market.

Coinbase has the largest capitalization in the United States among cryptocurrency platforms. Over the entire period of its existence and development, the company has attracted more than one billion investments. As we can see, if any of the cryptocurrency exchanges managed to enter the public market, it was Coinbase.

Since its launch, the exchange's trading volume has totaled $455 billion, and its reputation as one of the safest platforms has generated revenue of $691 million. The crypto exchange contains the assets of more than 43 million users, totaling $90 billion. The placement of the company's shares was planned back in January, when the platform launched the sale of securities on the Nasdaq Private Markets exchange. As of February 24, the company's value is estimated at $100.2 billion.

Exchange Rates 25.02.2021 analysis

The company perfectly chose the moment to issue shares, exactly during the surge in cryptocurrency prices. This will help the platform to make a loud statement and get high stock ratings. The only problem may be undervalued demand, which will cause a shortage of the Central Bank, since the company issued a little less than a percent of its capital. In any case, the entry into the public market of the crypto exchange will take place for the first time in history and will affect the market of digital assets.

Such an announcement will definitely attract new users and raise interest in the cryptocurrency market. The increased demand will have a greater impact on bitcoin, whose quotes will start to grow. Coinbase's entry into the public space may have the same effect as Tesla Motors' investment injection into bitcoin in early February. But only under certain circumstances. Also, the company's shares can synchronize with the indicators of bitcoin, which will make the exchange's quotes volatile, similar to the prices of digital assets. However, the opposite situation is also possible, in which the coin and the stock exchange will not allow each other to make sharp jumps. Nevertheless, considering the stronger position of bitcoin, this scenario is less obvious.

One way or another, this is positive news for the cryptocurrency market, because the increased interest will lead to an increase in the quotes of all major altcoins. In addition, other exchanges may follow the example of Coinbase, launching a continuous process of increasing interest in the crypto market. Of course, this is a great opportunity to gain additional leverage on the cryptocurrency market and a real mechanism to reduce the volatility of digital coins.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Artem Petrenko,
Analytical expert
InstaForex Group © 2007-2021
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